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[GETTY PETROLEUM LOGO]
November 16, 2000
Dear Fellow Stockholders:
In light of developments -- as well as recent press articles -- since I
wrote to you on November 9 concerning our merger agreement with OAO LUKOIL and
its subsidiaries, I'd like to update you on the status of our transaction and
the proposal from United Refining Company.
As we have informed you in our public filings with the SEC, your Board of
Directors received a written proposal from a subsidiary of United on November 6,
2000. Although it was not an offer, your Board determined, after consultation
with its legal and financial advisors, that this conditional proposal might
result in United making an offer superior to that made by Lukoil. Since then, we
have had discussions with United regarding the various contingencies in their
proposal, and on November 9, 2000, we received a "clarifying" letter from
United. On November 13, 2000, we publicly filed with the SEC an amendment to our
Schedule 14D-9 describing that letter.
Our agreement with Lukoil for their purchase of all outstanding shares of
Getty Petroleum Marketing for $5.00 per share remains in full force and effect.
Your Board has authorized and directed the officers of the Company, together
with its legal and financial advisors, to seek clarification of various aspects
of United's proposal, particularly with respect to its conditions. Your Board
also authorized the officers to furnish information to United about Getty
Petroleum Marketing and to participate in discussions or negotiations with
United regarding its proposal. This is being done in accordance with applicable
law and in compliance with the terms of our merger agreement with Lukoil.
Based on the correspondence we have received to date from United, you
should be aware of the following:
1. While United's proposal and press commentary indicates it might pay
$5.75 per share, United's November 9 letter actually indicates a price
of approximately $5.40 per share, because "any break-up fees and expense
reimbursement owed to Lukoil [-- approximately $0.35 per share --] will
be for the account of GPM's current shareholders." (Lukoil's offer is
$5.00 per share, net to shareholders.)
2. United's proposal is subject to the condition that at least 90% of Getty
Petroleum Marketing's shares are tendered into any offer United might
make -- in other words, if United makes an offer and stockholders tender
less than 90% of the outstanding shares, then United would not be
obligated to purchase any of the shares. (Lukoil's offer is subject to
the condition that a minimum of 50% of Getty Petroleum Marketing's
shares are tendered.)
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3. United indicates that it has received a commitment letter from its
financing institution for the portion of its proposed purchase price not
provided by a $30 million equity contribution; however, United does not
wish to provide us with a copy of the commitment letter at this time.
(Lukoil's offer has no financing contingency.)
4. United has resumed its due diligence investigation of Getty Petroleum
Marketing, including with respect to environmental matters, under a
confidentiality agreement it signed in April 2000. (Lukoil has completed
its due diligence investigation.)
5. United indicates that it wishes to discuss changes to the Master Lease
with Getty Realty Corp. To date, there have not been any such
discussions between United and Getty Realty. (At the time Lukoil's
merger agreement was signed, Getty Petroleum Marketing and Getty Realty
executed an amended Master Lease, which will become effective only upon
the closing of Lukoil's offer.)
If United or any other prospective purchaser submits a formal written offer
prior to Lukoil's purchase of shares under their offer, your Board will consider
it in accordance with our duties to you and the terms of our merger agreement
with Lukoil. To date, however, your Board has only received a highly conditional
proposal from United.
YOUR BOARD HAS UNANIMOUSLY APPROVED THE LUKOIL MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMENDS THAT YOU TENDER YOUR SHARES
PURSUANT TO LUKOIL'S OFFER. TENDERING YOUR SHARES INTO LUKOIL'S OFFER WILL NOT
PREVENT YOU FROM LATER WITHDRAWING YOUR SHARES BECAUSE LUKOIL MAY NOT ACCEPT
YOUR SHARES FOR PAYMENT UNTIL 12:00 MIDNIGHT, NEW YORK CITY TIME, ON DECEMBER 8,
2000. YOU WILL BE ABLE TO WITHDRAW YOUR SHARES FROM LUKOIL'S OFFER AND TENDER
THEM INTO ANOTHER OFFER, IF ONE IS MADE, AT ANY TIME PRIOR TO LUKOIL ACCEPTING
YOUR SHARES FOR PAYMENT.
If you have any questions or need additional assistance, please call
MacKenzie Partners, Inc. at (212) 929-5500 (call collect) or (800) 322-2885
(toll-free) or e-mail them at [email protected].
On behalf of the management and directors of Getty Petroleum Marketing, we
thank you again for your support.
Sincerely yours,
[LEO LIEBOWITZ SIGNATURE]
Leo Liebowitz
Chairman and Chief Executive Officer
